Fiscal impacts of immigration 2005/06
Table of Contents | Next Section
Executive Summary
This report estimates a defined fiscal impact of New Zealand's resident migrants on a set of government activities, and gives comparable figures for the New Zealand-born population. The report also summarises the fiscal impact of migrant sub-groups by the duration of residence, region of birth and region of residence. The study examines occupational and study characteristics of migrants, and considers migrants' long-run impacts on the economy.
As at the census night in March 2006, New Zealand had a migrant population of approximately 927,000. The study estimates that this migrant population had a positive net fiscal impact of $3,288m in the year to 30 June 2006. The net impact of migrants estimated in this study represents growth of approximately 15 percent per annum in real terms, compared to a similar study by BERL in 2003. The New Zealand-born population of 3.1m people had a lower net fiscal impact of $2,838m.
The net impact is made up of the difference between fiscal revenue and expenditure. The study estimated migrants contributed a total of $8,101m through income taxes, GST and excise duties. Estimated fiscal expenditure on the migrant population was $4,813m. This includes government spending on education, health, benefits/allowances and superannuation.
The study shows that all sub-groups of the migrant population had positive net impacts, although these impacts differed by the duration of residence, region of birth and region of residence in New Zealand. The net fiscal impact of migrants climbs with duration of residence, although this is partly attributable to the age profile of these groups. The net fiscal impact per head was $2,680 for recent migrants, $3,470 for intermediate migrants and $4,280 for earlier migrants, while the comparable figure for the New Zealand-born population was $915 per head.
The latest study show substantial increases in the positive net fiscal impact of migrants compared with BERL's previous fiscal impact studies in 1999 and 2003,. The net fiscal impact of migrants grew 80% between 2002 and 2006 (in real terms). This change was driven by fiscal revenue growing more quickly (29 percent) than expenditure (8 percent). As the migrant population grew by 25 percent of this period, the per capita fiscal impact also rose - by 44 percent. These positive impacts flowed through regardless of duration of residence, with the largest proportional increases coming from the recent and earlier migrant groups.
The total net fiscal impact of migrants rises with duration for all migrant groups but migrants from the Other region category (i.e. Africa, the Middle East and South America). The net impact per capita by region of birth differs markedly between recent and earlier migrants. It rises with duration for Pacific Island migrants but falls for migrants from the UK, Ireland, Europe and North America.
Migrants residing in the Auckland region dominate the overall fiscal impact, and this region is home to over 45 percent of all migrants in New Zealand. As they become earlier, migrants tend to shift out of the metropolitan areas in and around Auckland and Christchurch to Wellington, the Rest of North Island and Rest of South Island regions.
Migrants tend to move to higher paid occupations as duration of residence increases. A higher proportion of migrants tend to be unemployed or not in the labour force than the New Zealand-born. The occupational mix of migrants differs by their region of birth, which may reflect differences in immigration criteria by region of birth. There does not appear to be a strong effect on the occupational mix by region of residence.
The final section of the study complements the main snapshot focus of this project by considering the long-run impact of migrants. A production function framework is used to suggest how immigration may affect the structure and performance of the economy. In the long-run, immigration may affect resource availability and use, the dynamism of the economy and how the New Zealand economy connects with the rest of the world.